Though the negotiations are yet to conclude, RBS, which is 82 percent state-owned, is expected to pay the US regulators up to £400m while nearly £100m to be paid to the Financial Services Authority.

Though there would be backlashes, the latest bonus payments would not be "as high-octane" as in 2012, when Chief Executive Stephen Hester was offered £1m bonus which he eventually turned down, an unidentified ally of Chancellor George Osborne told the newspaper.

There would be "enormous anger if UK taxpayers pick up the tab for the individual sins of traders who were trying to rig Libor rates," Pat McFadden, Labour member of the Treasury committee told the FT.

Meanwhile, John Hourican, RBS' investment bank chief is expected to receive share bonuses worth £4m, weeks before his expected departure, according to a report in the Guardian.